Benchmarks may extend losses on negative global signals

GIFT Nifty:

The GIFT Nifty December futures contract is currently down 33 points, indicating a negative start for the Nifty 50.

Institutional Flows:

Foreign portfolio investors (FPIs) sold shares worth Rs 4,224.92 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 3,943.24 crore in the Indian equity market on 19 December 2024, provisional data showed.

According to NSDL data, FPIs have bought shares worth over Rs 10069.97 crore (so far) in the secondary market during December 2024. This follows their sale of shares worth Rs 39315.78 crore in November 2024.

Global Markets:

The Dow Jones index futures were down 168 points, signaling a weak opening for U.S. stocks today.

 

Most Asian stocks declined on Friday as investors awaited the release of the U.S. Personal Consumption Expenditure (PCE) price index, a key inflation gauge, for further insights into the Federal Reserve's monetary policy stance.

Meanwhile, Japan's consumer price index (CPI) rose slightly more than expected in November. Core CPI, which excludes volatile fresh food items, increased to 2.7% year-on-year, exceeding the previous month's 2.3%.

The Bank of Japan (BOJ) held interest rates steady on Thursday, its final meeting of the year, and provided limited clues on future rate hikes. However, the central bank projected a gradual increase in inflation over the next year.

In Europe, the Bank of England also kept its policy rate unchanged at 4.75% on Thursday.

U.S. stock indices closed mixed on Thursday after a sharp decline the previous day. Investors remained cautious about the Fed's hawkish stance and the potential impact on the economy. The S&P 500 and the Nasdaq Composite fell 0.1%, and the Dow Jones Industrial Average closed 0.04% higher.

The U.S. House of Representatives rejected a Republican-backed funding bill on Thursday, increasing the risk of a government shutdown as the current funding deadline approaches midnight on Friday.

Domestic Market:

Key equity benchmarks tumbled for the fourth consecutive day on Thursday, fueled by negative global sentiment. The Federal Reserve's decision to slash interest rates by 25 basis points on Wednesday, its third consecutive rate reduction, provided some respite. However, the central bank's hawkish stance, signaling fewer rate cuts in 2025 due to persistent inflation and a robust economy, dampened market spirits. Volatility gripped the market as the weekly index options on the NSE expired. The S&P BSE Sensex tumbled 964.15 points or 1.20% to 79,218.05. The Nifty 50 index dropped 247.15 points or 1.02% to 23,951.70. In four consecutive trading sessions, the Sensex and Nifty plunged by 3.54% and 3.29%, respectively.

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